Note: I’m not concerned here with whether or not the Laffer Curve as originally intended is a useful idea or what the optimal marginal tax rate is.
I’ve always broadly believed that act utilitarianism was correct in its most demanding form. However, I rarely actually maximize utility impartially because, well, it’s really fucking demanding. Outside of being a vegetarian, Peter Singer would probably not approve of my lifestyle—I travel carbon-intensively a lot, donate way below 10% of my income to effective non-profits, and constantly waste time and money on anything that isn’t literally saving human lives.
Convinced that maximizing utility is correct, I went to one of the main sources for 20th century ethical thought, Derek Parfit, and his first work, Reasons and Persons. Having never really read analytical philosophy before, it was indeed slow going. I covered maybe only 5-15 pages of dense argumentation per day, and many days I was too intimidated to open it at all. After a month, I’m only through the first section of the book, on whether or not ethical systems are self-defeating.
BUT I have already had one view quake. My prior view was that there should be an unlimited focus on impartially maximizing utility.
- All people, all the time should do what would generate the best outcome.
- For people in the developed world, this would mean focusing 75% or more of their time and resources on altruistic endeavors, with an increasing percentage as your amount of time and resources increased.
One obvious problem with that is that even as someone who believes the above, I have never come close to that standard. The problem Parfit found with the above formulation is that if we could somehow convince (or more likely coerce) everyone to act to maximize utility, then a very large majority would be miserable and thus actually lower total utility.
Thus the Ethical Laffer Curve:
My new formulation:
- All people, all the time should do what would generate the best outcome.
- This means focusing as much of your time and resources as you can on maximizing utility, up to the point where that focus begins to decrease personal utility at a faster rate than total utility is increasing.
Some interesting points:
- The X axis allows for some combination of personal preference. Person 1 may focus 95% of their time on utility maximization, Person 2 may focus on 30% of their time before hitting a negative return.
- The Y axis allows for a lot of debate over what utility really is, although the boundaries seem defined as a slow, painful death and literally being Bill Gates—infinitely wealthy and pursuing work you find meaningful. It’s not clear that we need to precisely define utility in order to pursue such a varied utilitarianism as this model proposes.
- People who think about utility maximization often leave out economic growth as an avenue for increasing total utility, but it is likely the most important (if pretty abstract) lever. That being said, most private sector jobs don’t increase GDP all that much. Entrepreneurs, technologists, engineers, consultants scaling innovations and financiers efficiently allocating capital should likely focus their time on driving productivity growth and donating their financial resources.
Like with a Laffer Curve, the debate is where the average and marginal “ethical tax rates” should be. It seems very apparent given the level of suffering in the world that the average rate is still too low, but that we’ve been steadily raising it—mostly through economic growth and the creation of international norms against war.
As for my ethical tax rate, I’m still certain mine is above my current contributions to utility maximization, but clearly not at Singer-esque rates.